US Dollar Gains Amid Middle East Tensions; Gold's Downside Risks Cushioned by Rate Cut Expectations

The US Dollar remains resilient as escalating tensions in the Middle East, particularly with Israel's potential preparation for an Iranian attack, continue to support the currency. This strength in the US Dollar is exerting downward pressure on Gold prices. However, expectations of a 50 basis points Federal Reserve rate cut in September are helping to cushion the downside risks for Gold. As markets remain cautious, all eyes are on the upcoming US Consumer Price Index (CPI) data release on Wednesday, which could significantly influence broader market sentiment and future movements in both the US Dollar and Gold.